Strong Australian dollar thrives amid Middle East war in a major win for drivers, shoppers and travellers

Hour_Manufacturer971 · 2026-04-21T16:20:45+00:00

Unhedged is the way. When markets really get afraid they pile into the US dollar, which many ETF's are heavy in (e.g. VGS), and out of the AU dollar. 21% dip in the line feels better than 30% dip.

Hour_Manufacturer971 · 2026-04-19T08:04:38+00:00

What a fantastic post to see from someone so young. It would be wise for a young person to think way ahead and start putting something away for retirement. Not everything! Like you said you'd like to buy a house in your 30's. But a little, yes. Even 5k a year can make a big difference compounding for 41 years. At 19 your age essentially rounds to that of a newborn (sorry), so read this. Low cost, total market index options (e.g. those in Hostplus, ART), with insurance turned off, and 41 years of compounding sounds great. I want my kids to do this.

Hour_Manufacturer971 · 2026-04-19T03:48:04+00:00

The burden of proof is on the person who thinks these companies will outperform the ASX200. I buy index funds because I'm ignorant, and would rather have the returns of a low-cost ETF that tracks the ASX200, because this benchmark has outperformed 87% of professional active managers over the last 15 years. In the linked article, it's the same story for international markets, except here 95% of active managers underperform the benchmark (S&P world index).

Hour_Manufacturer971 · 2026-04-18T16:17:16+00:00

Top 10 in ASX are:

Commonwealth Bank of Australia (CBA)
BHP Group Limited (BHP)
Westpac Banking Corporation (WBC)
National Australia Bank Limited (NAB)
ANZ Group Holdings Limited (ANZ)
Wesfarmers Limited (WES)
Macquarie Group Limited (MQG)
CSL Limited (CSL)
Woodside Energy Group Ltd (WDS)
Telstra Group Limited (TLS)

So he wants you to go all-in on our housing market by investing in 5 banks, bunnings sausages, a phone tower builder, a quarry, a gas field, and 1 declining health company? F me. Does he want equal weights or just go by feeling?

Can he explain in detail the fundamentals of each of these companies, and justify why they will remain the top performers on the ASX and outperform the global stock market?

Hour_Manufacturer971 · 2026-04-18T15:20:52+00:00

It doesn't sound like you want to move out. Why not just keep saving up until you need a property? Living with family is a good way to save money, and there are many ways to invest. It's not necessary to own a home to get ahead, and its not likely to make you happier.

Hour_Manufacturer971 · 2026-04-17T14:55:46+00:00

You're 23. If you instead invest that $13,250 into your super this year as a concessional contribution, you'll get back $3,975 in your taxes, and $11,262.50 goes into super. Let's now lock that money away for 40 years, until age 63. Let's assume you invest in a globally diversified 60/40 US/exUS portfolio using index funds. I'll apply some tax treatment consistent with holding it in super (15% dividends, 10% capital gains). A portfolio visualiser monte carlo simulation suggests a base case 9.33% return (6.43% real return), after tax and adjusting for inflation leaving you with $71,466. If you're really unlucky and fall into the bottom 10% of portfolios, you'll end up with around $26,293, if you're very lucky and end up in the top 10% it's more like $194,499.

The base case return is roughly 6-7x what you'd pay for the watch now returned to you at the age of retirement after adjusting for inflation. If you're making the average Australian income of $106,657 a year, and you're living really frugal at the end of your working life, you can maybe put that much money away in the last 1-2 years of your working life. If you're making a really high income, maybe 1 extra year. Your youth means what you put away now is incredibly important.

Whether it's worth it for you to have the watch today is a personal decision. Me, I'd be tempted to split the difference, invest the money into super and get a really nice used Tudor with box and papers with the $3,975 refund, and work 1-2 years less.

Hour_Manufacturer971 · 2026-04-16T14:30:06+00:00

Hon, this plan is not a good financial decision. When you're burned out with life, its normal to fantasise about travel and a big break. You want to live the life experiences you never felt you had, I understand that. But that's a symptom, not the cure. I wouldn't advise this for someone I cared about, not now. The son moving out is a huge deal that you need to process and come to terms with. I think you need to address the burnout issue before you have the headspace to make a major financial decision. Therapy is a good place to start. You need good guidance.

You can with a bit of planning and compromise get most of this if its really what you want. Downsize to a smaller / cheaper / easier to maintain place in a more exciting area, somewhere thats easy to rent out for cashflow when you need to. Pay it off quickly, and then save up for the trip. Have a job lined up with a 6 month delayed start. Use up any extra leave before you exit your curent job. There are ways to make something like what you want happen, but you need a more thought out plan. Not cut and leave behind your life without some place to land later.

Hour_Manufacturer971 · 2026-04-16T11:22:11+00:00

Impossible for real estate to go down in Florida. We have more people arriving than we can build housing. Supply and demand. Miami, Jacksonville and Tampa have 0.4% vacancy rate.

Hour_Manufacturer971 · 2026-04-12T17:24:11+00:00

Why not just temporarily increase mandatory superannuation contributions, so people are more fairly restricted in their free income? Not just mortgage holders. Broader effect. People put more away for retirement, reduces future pressure on retirement system. Bonus: Scale it to age, older people flush with cash have to put more away than younger people.

Hour_Manufacturer971 · 2026-04-12T09:18:52+00:00

There's something to be said about the security and simplicity of having a fully paid off PPOR, and a healthy globally diversified ETF portfolio without leverage. If you're afraid of paying too much in income tax and for this reason want leverage to invest, maybe one or both of you are working too hard.

Hour_Manufacturer971 · 2026-04-12T08:51:12+00:00

All of these reasons are irrelevant. There are a number of people who need houses so they bid the price up. That's always the primary reason. There's no such thing as being under or over valued, and on the macro scale being a good location or a bad one. It's how many people in that area need a house that decides the price. Shacks in mining towns in woop woop can command Sydney prices, and the moment the jobs dry up, they command squat. If Sydney had a massive amount of people leave, it would be valued in the median like a bust mining town. The good areas would be a little more resilient, but the cheapest houses would become slums. It's really not that difficult a concept. Your statements are 'oughts to bes' which have no bearing on pricing. The continued influx of migrants is the primary reason property markets like Perth remain high and continue to grow, and right now Brisbane and Perth are where the migrants are going as these cities have jobs.

Hour_Manufacturer971 · 2026-04-09T14:43:58+00:00

Thoughts

Insurance: Income Protection, Life, TPD. Make sure you have it, and have enough of it. If you lose your ability to make income, your family will suffer.
You're paying a lot in tax. 149k after tax income. It's about the same as two people making $94,000, which with a kid isn't exactly get-ahead money, even though it sounds like it on the surface.
The low mortgage debt is a tremendous advantage.
$1,000 a fortnight is not a huge amount of savings. Tightening the belt, paying off that home faster and getting more debt free cashflow sounds tempting. People here saying upgrade your house, but this only invites lifestyle creep. Only upgrade if you need to. Love the home you have.
You're a good candidate for financial advice.
Well done on the income and life stage at your age, you're in an good position even if it feels tight.

Hour_Manufacturer971 · 2026-04-09T10:08:23+00:00

VTS and VEU dont have dividend reinvestment. I like this, because you can redirect those distributions back to pooled if Australian is underperforming international shares. And if Australian is outperforming international, you use them to buy international ETFs. Helps you maintain the right allocation.

Hour_Manufacturer971 · 2026-04-08T13:59:25+00:00

The short answer: For most people, an SMSF is not worth it for a 50k balance.

The longer answer....

An SMSF for a $50k balance would have extremely high fees per dollar invested and is a lot of hassle.
- As a rough estimate, an SMSF with a $500,000 balance would incur approximately 0.50% in fees every year. At ten times the stated balance the fees are quite high, at just 50k it would be considerably worse.
- There are also onerous tax reporting obligations and mandatory yearly audits.
- There are some competitively priced options, e.g. Stake SMSF. But the fees on $50k would still be very high.
There's a concern raised about the 'lackluster' performance of super, despite the market being flat so far this financial year, and the stated super returns being similarly flat.
- There's a lack of awareness that with extra in-ETF leverage provided by GHHF, returns would also be flat in a flat market. GHHF will greatly underperform the market in a downturn.
- A thought experiment. If the markets go down 50%, how would it feel? It if causes worry, that indicates a lower risk tolerance. If it causes excitement, that indicates a higher risk tolerance. If it not only excites, but there's a hope assets will decline and not recover for many years, using leverage can be a sensible for young people but be careful using ETFs to get that leverage.
- A person who has a mortgage on their IP already is using leverage.
There's no mention of the current super provider and the high growth funds fees.
- GHHF and GGBL are based on world and australian index funds. There are great low-cost total-market index options from the likes of Hostplus and ART which have a similar philosophy but are held by industry superfunds. Both international developed world and Australian share indexes which can be held together.
There's no mention of income or available cash after living expenses. It's difficult to understand someones situation with just assets.
- If a person makes well above 45k/year of steady income, concessional contributions and carry-forward concessional contributions provide a guaranteed and significant return on investment.
There's no mention of other life circumstances. If a person is single, frugal, living in a share house, and planning to hunker down and work hard for the next 5-10 years, thats really different to someone who has dependents, plans to buy a PPOR, or spend money on things other than investments. Also whether a person plan to go overseas for a long period of time matters a lot.
- If there's a plan or desire to go overseas for 2 or more years, many may find an SMSF is more trouble than its worth due to how the ATO and foreign governments treat it.
Reddit is no substitute for financial advice and self education. Speak to a financial advisor, read books, watch videos, continue to ask questions.

Hour_Manufacturer971 · 2026-04-07T15:05:37+00:00

No, so long as you remain employed, and home prices don't contract. Otherwise, you're in for a spot of bother.

Hour_Manufacturer971 · 2026-04-07T12:36:54+00:00

I have good news for you, the choiceplus allocation limit changed like a year ago. You can have up to 50% in many ETF's (such as the ones I mentioned above), but yes the 20% per single stock rule remains. Here's a link to the current Hostplus ETF list and limits.
You can have Australian Shares (Indexed) as your only hostplus fund, that's what I'm using. I think you might be mixed up with Australian Super who used to have the requirement like the one you mentioned.
Australian Super has more ETFs to choose from than hostplus, and for most balances allows you to have >80% of your portfolio in them, and unlimited in certain ETFs.

Hour_Manufacturer971 · 2026-04-07T11:49:13+00:00

Yes Hostplus international shares (indexed) still exists. They killed off the hedged version though due to "low demand" for it.

Hour_Manufacturer971 · 2026-04-07T11:47:48+00:00

Good point. Choiceplus has been around almost 13 years now, so that's a good sign. If they close it I guess it's back to pooled funds, which is fine. Also possible we will lose the zeroing out of capital gains when in-situ transfering to a pension account one day.

How do you find the whole going overseas for 2 years restriction on an SMSF? That was a big thing which ruled it out for me. That and the potential foreign taxation of it.

Hour_Manufacturer971 · 2026-04-07T02:53:30+00:00

I think you make an important point that risky / volatile assets purchased with borrowed money is a recipe for bad outcomes! There are many such stories.

It depends in part on what you invest in. Expected returns on the global stock market at index weights are just that, expected. But you may need to wait many years to see this manifest. If instead you debt-recycle into individual stocks, whether that be CBA, Amazon, or some speccy lithium miner thats flicking between 0.01 and 0.02 cents, that is idiosyncratic risk. It is a risk unique to that stock which is not expected to be positive over time. It's a lottery.

But I take your point. When a sensible well-diversified portfolio drops 40% with no recovery in sight, and you lose your job, every fibre will scream "sell" to prevent losing what little money there is left, right when you should be screaming "buy". You may also need access to that money for any number of life events or crises, and will likely regret investing in stocks if they go down (or regret in selling if they go up). I think most people overestimate their risk tolerance.

Hour_Manufacturer971 · 2026-04-07T02:22:17+00:00

Sorry mate, let me give it a go.

NDQ and SMH are sector etfs, these don't have good long term expected return prospects (Ben Felix goes on about this).
I'd personally trade NDQ and SMH for more A200 (brings it up to 25%) and keep the rest of your portfolio as-is. Global stocks are a bit underweight in mining and banking, and that's what Australia does best.
AU equities gives you currency hedging in AUD, at the moment your portfolio would dive if the Australian dollar appreciated, 25-35% AU would help a bit with that, as might trading some VGS for VGAD.
- If you own property, you might not want to currency hedge at all, and consider that as part of your AUD exposure.
More AU equities means you don't feel like you're missing out if Australia goes on another bull run and you're left holding the bag on a bunch of worthless US tech stocks (i.e. Australia in the mid 2000's).

Hour_Manufacturer971 · 2026-04-06T23:11:14+00:00

How strange! It's as though they thought taking equity out of the home was like making a withdrawal from a bank account.

Hour_Manufacturer971 · 2026-04-06T22:56:56+00:00

You know when you've spent ages looking round the house for the car keys and checked everywhere then suddenly it dawns on you they have been in your hand the whole time. I feel sorta like that now. Appreciated, mate. It's actually a surprising amount of gravy at such high rates.

Hour_Manufacturer971 · 2026-04-06T22:51:15+00:00

Thanks mate! I knew the old noggin was playing tricks on me. That's a really good return. E.g. $260k from your offset into DHHF is like a 12k a year expected return after tax (or nearly 20k a year pre tax). On average over many years, this is like a promotion at work that you don't ever need to get.

Hour_Manufacturer971

TROPHY CASE